Banks turn a market dampener

HÀ NỘI — Shares unexpectedly edged down yesterday despite a positive morning performance as leading bank stocks lost steam on cautious sentiments ahead of the Tết (Lunar New Year) holiday which starts next week.

The benchmark VN-Index on the HCM Stock Exchange decreased 0.2 per cent to close at 683.3 points. It had risen 1 per cent on Tuesday.

On the Hà Nội Stock Exchange, the HNX Index went down 0.8 per cent to end at 83.3 points, lifting the two-day loss to 1.3 per cent.

Surprisingly, the four largest banks by market capitalisation and liquidity on the HCM City’s bourse, Vietcombank (VCB), Vietinbank (CTG), BIDV (BID) and Military Bank (MBB), lost between 1-2 per cent of their value.

Only two maintained their rise in value: Eximbank (EIB) and Sacombank (STB), with gains of 1 per cent and 2.3 per cent, respectively.

Allowing greater foreign ownership of banks has generally been seen as a positive step forward, speeding up the country’s ascent to emerging-market status.

According to analysts at Artex Securities Co, decreases in exposure by investors could be attributed to risk-averse sentiments when a long holiday is round the corner. Slowing down trading could reduce financial costs, especially cost of borrowings to buy stocks.

“This is a periodical phenomenon and its influence depends on market and economic conditions,” the analysts wrote.

The VN-Index and leading stocks have risen strongly since October 2016 and will likely enter a downward correction, they said, predicting another one or two declining sessions before a rebound.